Wyoming Entrepreneur.biz Blog

Brilliant Definition of Web 2.0

This was sent to me from a collegue on EconDev.  The drawing is the work of Jessica Hagy (http://indexed.blogspot.com/2008/08/this-is-what-20-means.html)

Why A Distributed Model in Wyoming?

I get a lot of questions about the operation that the WMRC runs in Wyoming, and one of the comments is often "why do you have centralized services?". I discussed this in an earlier post, but something I read today gave me an even clearer visualization. Wyoming has 23 counties. Three of those counties are larger in area than the entire state of Massachusetts. Unlike Massachusetts, we only have 510,000 or so people.

Folks who come here just don't understand the miles and miles of ....miles and miles that we have in Wyoming. Face to face is just not a viable option for the type of service we offer, so we've had to adapt to the realities of the western rural landscape.

Have you had any experience with Economic Gardening?  How does it compare to our Wyoming approach?

Geographic Information Systems (GIS) in Economic Gardening

The following is a "Biz Tips" article I wrote a while back for Wyoming newspapers and gives information on why we use GIS.

According to the United State Geological Survey, a GIS (Geographic Information System) is “a computer system capable of capturing, storing, analyzing, and displaying geographically referenced information; that is, data identified according to location. Practitioners also define a GIS as including the procedures, operating personnel, and spatial data that go into the system.” That’s a kind of long-winded way of saying that GIS takes information and puts it on a map.

Why? Because most people understand maps much better than spreadsheets, databases or columns of figures and numbers. If you are a business owner, chances are most of the information that you have available about your business has a geographic component.

For example, if you have a pizza shop you might want to create a map that shows your delivery area. This is an important thing to have since you know that if your drivers have to travel more than 15 minutes from your store, the pizzas will not be hot for your customers. You could take your car and drive around town trying to figure out how far 15 minutes is…or you could do the same thing with a GIS system in a few minutes.

Using computer software, the GIS would figure out where your store is (this is called geocoding), and then from there it would combine that information with your local street map and figure out exactly how far a car can travel in 15 minutes. The end result will be a clear map showing your delivery area, and even more importantly, happier customers with hot pizzas!

Another use would be to figure out where your customers are. If you have a customer list that includes street address information, a GIS can create a map that will show you exactly where each customer lives. Sure, you can look at a spreadsheet or database table, but a map will quickly and clearly show you the area that you are serving. To take this a step further, an advanced GIS can then look at where those customers live, and tell you about who they are and where there may be more of them.

GIS is a powerful tool and it could be something that would be useful to your business. However, remember that GIS is really a set of tools that must be applied by people who use it to solve problems.

Do you have any experiences in using GIS in your business?

Economic Gardening - A Distributed Services Approach

Littleton's Chris Gibbons and his group are probably the preeminent practioners of Economic Gardening in the world today. Chris is the one who invented the concept and he has had an astounding impact on the economy of his city. However, he has one major advantage that we at the WMRC lack…Littleton isn’t very big!

Wyoming, the smallest state in population at about 520,000 IS BIG! We are the 9th largest state with over 970 thousand square miles. I like to tell people that we are a small city with really long streets. This fact means that we cannot offer the personal marketing information services that Littleton does. Chris and company are able to keep “canned” report for the Littleton geography and provide instant service to people who drop in. While the WMRC does maintain some pre-prepared reports, our experience is that different businesses are interested in different geographies.

In addition, it is very difficult to have a face-to-face conversation with a business person who is in Jackson (a mere 7 hour drive from from my home in Cheyenne!) One of the key components in Economic Gardening as I understand it is that you need to provide individualized service. The way that we manage that in Wyoming is by utilizing a distributed Economic Gardening model By this I mean that the WMRC provides the marketing research, GIS and other information resources. The information flows to the individual client via our network of partners who include the Wyoming SBDC, the Wyoming Business council, Manufacturing Works, GROBiz (Wyoming’s PTAC), UW, and other state agencies.

The key to making the distributed model work is having partners who will cross-refer client, who are willing to admit that others may have a more appropriate skill or knowledge set and who are more interested in the benefit to the client than to maintaining their own private fiefdom. This works well in Wyoming, but does seem to be a problem when other regions start looking at replicating what we do in this state.

Why Economic Gardening

Economic Gardening is a term invented by Chris Gibbons in Littleton, Colorado. I became aware of this program when I was hired to run the new Wyoming Market Research Center in 2003. Basically, an economic gardener is someone whose goal in life is to help grow small businesses locally by providing services and information that are normally only available to the largest of companies. More later.

Protect Your Accounting Data Two Ways

Today's guest blogger is Becky McCray from Small Biz Survival. Her bio follows her post!

From Becky McCray...

As the last invoices and statements come in and you finish up your 2008 accounting, it's time to backup your accounting records. Here are two important ways you protect your data.

1. Take a backup offsite

Yes, offsite can include online. The goal is to be sure you don't keep all the copies of your accounting data in the same building. In the event of a disaster, you will be glad you went offsite.

2. Run your year-end reports on paper.

Why paper? Because you need to keep data up to 10 years. Will you still be able to open those zipped backup files in 10 years? Will you still have the same accounting software? Probably not. Paper is your best data insurance over the long term. Store these off-site as well.

Here are the three types of reports you want to get on paper, along with the likely report titles:

• Your basic financial position: Profit and Loss, and Balance Sheet
  
• Detail of every transaction: Transaction Detail by Account
  
• Important payroll tax totals: Employee Earnings Summary

The basic financial and detail reports document your company's year. The detail of every transaction for the entire year is going to take some time, so you may want to print it month by month, rather than all year at once. The payroll tax reports protect you in case an employee ever questions withholding, perhaps even years after the fact.

I honestly hope you'll never need your backups. But you'll feel better once you get them done.

Becky McCray is a small town entrepreneur. She writes about small business and rural issues, based on her own successes and failures. She is the co-owner of a small town retail liquor store and small cattle ranch. As a consultant, she helps small businesses to maintain their web presence and helps rural nonprofits and governments with grant writing and project management.

I Have No Competition (and other fairy tales)

One of the most common statements that I hear from businesses, especially those that have invented a product, is that they have no competition.  Sometimes they’re right, but most of the time, folks need to adjust the way they think about their product and the benefits it provides to the consumer.

 

A consumer will look at your product and try to determine what needs it meets for them.  In the case of the zip tie shoelaces, a consumer is going to look at the other methods that she can use to accomplish the same goal.  Even though there may not be another zip tie shoelace on the market, there are numerous shoe strings available, from cloth to woven to leather.  In addition, some shoes use zippers or Velcro to secure them on the user’s feet.   These are all competition to the zip tie shoe tie…and your business plan needs to address how your product fits in this competitive landscape. 

 

Investors, like your bank, generally define competition as any service or product that a customer can use to fulfill the same needs that the company fulfills.  This can include similar products, substitute products as well as other options, such as homemade alternatives.  When you plan for the success of your business, you need to take in to consideration all of the possible competitors. 

 

Once you decide who else provides the same or similar benefit to what your product provides the next step is to carefully and rationally look at the strengths and weaknesses of both your product and the competition.  Be honest.  Just because you spent hundreds of hours inventing the zip tie shoe lace, do people really think that it’s better than a shoe string?   Check with consumers (and not family, but people who will give you an honest opinion).  Compare pricing, ease of use and make a list of where you excel and where you fall short.   An honest look at both your product and the competition will help you understand how viable your invention will be in the marketplace and will help guide you in selling the product to consumers.

 

Having competition is not necessarily bad.  In fact, an investor may view a statement of “I have no competition” with some concern, as it may mean that there is no demand for what you are offering.  If there are few or no competitors, there may not be a large enough customer base to sustain your company.  However, if you have competitors and if you can show that your product or service has significant advantages in design, usabilty or price, then investors are more likely to want to fund you.

A little competition is a good thing…so make sure that you do a good job of understanding yours.

 

Do you have any examples of unexpected competition?

Be Interesting

In tough financial times, it can be very difficult to determine how to manage your company’s limited budget. But there’s good news for those who want to allocate some funds for advertising:

 

You can successfully market your small business with an advertising budget of $0.

In Wyoming, we are blessed with a small town atmosphere throughout the entire state. Even if you are located in some of the bigger towns you still won’t face the same challenges in getting recognized as a small business in a metropolis would. This means that word of mouth marketing is your biggest ally, and the easiest way to generate it is by being interesting. Give people a reason to talk about you.

 

Consider how often you flip through a magazine or a newspaper without noticing one advertisement, or how often you change the channel when your favorite show comes to a commercial break. Then add to that the number of people who now have satellite radio or Tivo and can skip ads altogether. You need to find another way to get people talking about your business, and nobody talks about a boring business.

 

Get creative. Be different. Think of something to do for your customers that will leave them with a story to tell their friends. Your goal is to get them to remember you. In the towns we have in Wyoming, it won’t take long for the word to spread.

 

In an economy where every dollar spent is absolutely critical for some businesses, you can still afford to market your business by letting others do it for you. You simply have to give them something to talk about.

Proper Pricing is Key to Success in Troubled Times

Pricing is a vital part of marketing a product.  It is generally considered one leg of the “4 p’s”, which are product, pricing, placement (location) and promotion.  If any of these legs is weak, then your product will have a much lower chance of succeeding.

 

So how do you know if your price is right?   Too many businesses only look at one factor.  Some look at what it costs them to make the product and then mark-up from there.  Other look at what competitors are charging and match that.  Others look at the profit that they need to survive and price accordingly.  Which is right?  All and none of them!

 

Now that I have you sufficiently confused, the real answer is that you need to look at all of these things when you set your prices.  You have to understand what competitors are charging to be sure that your price is competitive.  However, don’t forget to look at the total price picture.   What things are different from your competitors.  Is your product superior?  If so how.  Are your terms different?  What is the value or cost to the consumer of those differences?  If you offer free shipping, then your price can be higher than a competitor who doesn’t.

 

You also need to know exactly what your product or service costs you to make or provide.  This is not just the physical components, but also the cost of your operation.  If you price to cover the dollars that you pay for components, you won’t cover the cost of salaries, marketing, store rents, etc.

I recently had an example where a client had a superb product that was across the board better than anything on the market.  He priced the product at the same level as a competitor that had an inferior product.  After we talked, I suggested that he try raising his price.  He resisted, but after thinking it over talked to someone else in his industry, who told him the same thing.  He went ahead and raised his price…and sales volume didn’t change at all.  By properly pricing his product, he’s selling just as many units as before, but now he’s making substantially more money on each unit sold and his business is profitable. 

 

It is vital to the success of your business that you properly analyze your pricing for each product to ensure that you maximize the potential sales and profits to your business.

 

How do you go about pricing your product?  Do you have any lessons to share?

The 5 Days of Christmas......Accounting Style

On the first day of Christmas my part time help found a box of uncategorized receipts for the year.

On the second day of Christmas my part time help found 2 unpaid invoices from 6 months ago and a box of uncategorized receipts for the year.

On the third day of Christmas my part time help found 3 returned checks, 2 unpaid invoices from 6 months ago and a box of uncategorized receipts for the year.

On the fourth day of Christmas my part time help found 4 checks to deposit, 3 returned checks, 2 unpaid invoices from 6 months ago and a box of uncategorized receipts for the year.

On the fifth day of Christmas my part time help found 5 IRS LETTERS, 4 checks to deposit, 3 returned checks, 2 unpaid invoices from 6 months ago and a box of uncategorized receipts for the year.

 

Do these verses look familiar?  The New Year is a perfect time to think about starting a manual or software accounting system for your business.  The key to using either system is in the initial set-up.  Software company’s advertise how “easy” it is to get started using their accounting package, and it is.  Everything is great until the business owner has his taxes prepared or tries to get a loan only to find out the set-up was incorrect from the start!!!!  Has anyone had a similar experience?  How easy was it to fix the problem?  Unless you have an abundance of time on your hands, make sure you have an accounting professional set up or review your work prior to inputting data the first time.